Australian banks Australian interest rates

Bank funding cost rocket flames out

Thursday, 14 April 2016

Australia’s bank funding cost rocket flamed out yesterday with CBA CDS falling 5bps to 115pbs:

One would expect as much given the second round commodity price surge. Our US and and European proxies also fell but not so far and so the Ponzi Index also retraced:

Given commodity-related credit spreads ripped in last night now that China is fixed I expect we’ll see a few more days of CDS price falls ahead.

About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.